The Motley Fool

Is there still value in Carsales.Com Ltd, Hunter Hall International Ltd, and Cochlear Limited?

With a number of my fellow contributors to writing recently of the importance of adding international exposure to your portfolio, this week’s list of company’s share prices hitting 52-week highs is quite topical.

Two of the following stocks have considerable international appeal, and several of them look to still be a buy at today’s prices:

Carsales.Com Ltd (ASX: CAR) – last traded at $11.83, up 15% for the year

Shares in Carsales recently hit a new all-time high despite no recent updates from the company, with investors possibly buying in advance of the company’s half-yearly report due out this month. However, I believe shares could be set for another dip in the aftermath of the upcoming report.

A similar situation happened in August last year when Carsales’ share price dropped 10%, after reporting 32% revenue growth and an 8% uplift in profit and disappointing investors in the process. Depending on the results and the market’s reaction, the share price could experience a similar dip in the coming weeks.

I am bullish on Carsales over the longer term but the company certainly has the growth potential to justify today’s prices, meaning any falls are likely to represent an opportunity, not a catastrophe.

Hunter Hall International Ltd (ASX: HHL) – last traded at $2.87, up 43% for the year

Strong performance for Hunter Hall’s subsidiary funds contributed to the fund manager’s overall price rise this year, with Funds Under Management and operating profit rising meaningfully. Dividends also rose, and Hunter Hall pays a 5.4%, fully franked dividend yield.

Curiously, the recently announced departure of CEO David Deverall didn’t have a negative effect on the share price, and shares actually rose further on the concomitant announcement that operating profit would be up 40% compared to last year.

A fair chunk of earnings come from subsidiary fund Hunter Hall Global Value Ltd (ASX: HHV), which is worth a closer look as it appears to trade at a discount to its Net Asset Value.

Cochlear Limited (ASX: COH) – last traded at $96.40, up 16% for the year

Cochlear has among the best international diversification of any company on the ASX, earning a majority of its revenue in Europe, Middle East, and Africa, while 17% of revenue is earned in the Asia-Pacific.

In addition to developing new products, Cochlear can also grow by increasing its market penetration, currently estimated to be around 5%. Tailwinds in the form of growing healthcare expenditure in emerging nations are also a significant boon over the long term. While shares might appear expensive right now, investors are getting a high-quality business with plenty of long term potential.

It’s impossible to know for sure where Cochlear shares will head in the short term, but over the long-term, I believe shares will be worth north of $100 apiece.

5 stocks under $5

We hear it over and over from investors, "I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" And it's true.

And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!

*Extreme Opportunities returns as of June 5th 2020

Motley Fool contributor Sean O'Neill owns shares of Limited. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Related Articles...